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Ride-the-Wave Strategy – Best for Stock Traders

Buy a stock one day post-EA if a stock reacts positively post-earnings:

Near the close of trading the EA-day for a pre-market-EA

Near the close of the following day for a post-market-EA

Sell-to-close after 7-10 days, or possibly earlier if a desired price target is
reached

Similarly,

short a stock one day post-EA if a stock reacts negatively post-earnings:

near the close of trading the EA-day for a premarket-EA

near the close of the following day for a post-market-EA

then buy-to-close after 7-10 days, or possibly earlier if a desired price target
is reached

Important: Ride-the-Wave is predicated on significant price momentum triggered
by an EA. The 7-10 day scenario is the maximum trade hold-time. If you see post
EA-momentum is halted or reversed by a significant opposite move, re-evaluate your
presence in the trade.

This popular StockEarnings screen below will give you a list of stocks that historically
exhibit significant price momentum following an EA for the next seven days:

The screen includes those stocks whose Earnings just came out in last two days.

Screen criteria:

Earnings Date Start Date : Current Date + -1 Day

Earnings Date End Date : Current Date + -2 Days

Predicted Move (Next Day) Max : 7%

Predicted Move (On 7th Day) Min : 7%

Strategy Guideline:

Buy the stock if stock has reacted positively. Short the stock if stock has reacted
negatively (see above).

Close the position in 7-10 days, or possibly earlier based on price move.

Volatility Crush Strategy - Best for Options Traders

The Volatility Crush strategy is used with stocks that typically experience relatively
low-to-moderate price moves (≤4%) following their Earnings Announcements (EA). The
basic trade idea is to sell put or call options right before the EA, collecting
a credit when options premium is very high due to elevated implied volatility (IV).
You then close the position right after the EA by buying the option back much cheaper
due to the significant drop in IV that occurs after the mystery of the EA disappears.
In assessing this trade, you need to do your homework to ensure you collect sufficient
premium to make the trade worthwhile.

This trade is practical due to the low-to-moderate price-move after the EA, which
generally won’t significantly affect the options price, unlike an “action” stock,
which experience great price moves post-EA. With these symbols, if you’re on the
right side of the price move, that’s a great thing. But if you’re on the wrong side
of the move, not so great. Consequently, by minimizing the effect of the post-EA
price move, you have a much better chance to profit from the reduction in IV without
it being ruined by a violent price move.

For this trade, open the position either (1) the night before the EA when the company
announces earnings or (2) during the EA day when it announces post-market, generally
capturing IV at or close to its peak.

For this trade, open the position either (1) the night before the EA when the company
announces earnings or (2) during the EA day when it announces post-market, generally
capturing IV at or close to its peak.

This popular stockearnings screen will give you a list of stocks which do not react
more than 4% fpost-EA. It includes only those stocks whose earnings are releasing
next day.

Screen criteria:

Earnings Date Start Date : Current Date + 1

Earnings Date End Date : Current Date + 1

Predicted Move (Next Day) Max : 4%

Options Type: Weekly

Strategy Guideline:

Options Strategy: Sell Call and Put

Options Strike Price: Current Stock Price – (% Predicated Move x 2)

Expiration Date: It should generally be the closest expiry immediately after the
EA.

Buy Insurance: Buying back Call and Put at Strike price which 10% lower than Sell
Strike Price is optional but recommended.

Watch Video for More Detail

Volatility Rush Strategy - Best for Options Traders

The Volatility Rush takes advantage of increasing options premiums into earnings
announcements (EA) caused by an anticipated rise in Implied Volatility (IV). With
this strategy, Buy a Call and Put at-the-money (a long straddle) 2-3 weeks before
the EA when IV is lower. Sell the position either (1) the night before the EA when
the company announces earnings pre-market, or (2) during the EA day when it announces
post-market, generally capturing IV at or close to its peak.

This popular screen will give you a list of stocks whose Options premiums tend to
rise into Earnings. It includes only those stocks whose Earnings are at least two
weeks away from today.

Screen criteria:

Earnings Date Start Date : Current Date + 15 Days

Earnings Date End Date : Current Date + 30 Days

Predicted Move (Next Day) Min : 5%

Options Type: Weekly or Monthly if that lines up with the two to three-week lead-time
for entering the trade

Strategy Guideline:

Buy a Straddle at or close to the money two to three weeks pre-EA.

Sell the position either the night before the EA when the company announces earnings
pre-market, or during the EA day when it announces post-market.

Expiration date should generally be the closest expiry immediately after the EA.

Straddle price should not be more 60% of predicted move.

Since Last Earnings

Change in share price since last Earnings release.

Why is it Important?

When share has gained more than 10% since it's last Earning release, it tends to
over react to minor bad news and give up some gains if not all. So, it contains
more downside volatility than upside When share has dropped more than 10% since
it's last Earning release, it tends to over react to minor good news and recover
some drops if not all. So, it contains more upside volatility than downside.

EPS Surprise (%)

Occurs when a company's reported quarterly or annual profits are above or below
analysts' expectations. Here is the formula to derive % EPS Surprice:

Why is it Important?

Earnings surprises can have a huge impact on a company's stock price. Several studies
suggest that positive earnings surprises not only lead to an immediate hike in a
stock's price, but also to a gradual increase over time. Hence, it's not surprising
that some companies are known for routinely beating earning projections. A negative
earnings surprise will usually result in a decline in share price.

Next Day Price Change (%)

Next Regular trading session Closing price following Earnings result.

For After Market Close Earnings, It is a next trading day closing price. For Before
Market Open Earnings, It is the same trading day closing price.

Stock Price Change Since Last Earnings Released:
-27.3%

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Connect to your brokerage account to trade ADOM directly from this page.

Buy (ADOM)

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ADOMANI, Inc. (ADOM) Frequently Asked Questions

1. What do you mean by "% Predicted Move After Earnings Announcement" (PMAEA) for ADOM?

It is non-directional predicted move in regular session after Earnings Announcement. We are expecting that stock price for ADOM will likely to reach % in either direction by the end of next regular trading session after Earnings are released and not necessarily the closing price.

2. Why is it important for me to know "Predicted Move" for ADOM

If you are a stock trader or portfolio manager and if you have ADOM in your portfolio, you don't want to wake up
in the morning on Earnings Announcement Day and see your portfolio down by 10% or more. Therefore, If you know Predicted Move
for ADOM three weeks before Earnings Announcement, you can have enough time to design hedging strategy
which can give you protection from a big drop which could be caused by bad Earnings result.

We help our hedge managers clients to build hedging strategy which provides protection from big drop after Earnings Announcement.
- If you are day trader and if you know the predicted move for ADOM three weeks before Earnings Announcement, it can help you to decide
whether to trade stock into Earnings or you should stay away from it.
If you are Options trader, you can take advantage of predicted move for ADOM by using Volatility Rush, Volatility-Crush and Ride-the-wave strategies.

3.What is Predicted Move After Earnings Announcement(PMAEA) for ADOM? How can I use PMAEA to make profitable trades in Earnings Season?

5. What is "Predicted Move on the 7th Day" (PM7thDay)? How can I use PM7thDay for ADOM in my trading strategies?

6. What is the next day trading volume for ADOM?

This is a trading volume for ADOM after Earning has been released. It is different from a average daily volume for ADOM. Usually, it is 5 to 6 times higher than average daily volume. Next Day Volume for ADOM is 354,912. Go to tab to learn how you can use next day trading volume for ADOM.

7. ADOM has moved UP 4% since last Earnings. How can I use ADOM's move in my trading?

When share has gained more than 10% since it's last Earning release, it tends to over react to minor bad news and give up some gains if not all. So, it contains more downside volatility than upside When share has dropped more than 10% since it's last Earning release, it tends to over react to minor good news and recover some drops if not all. So, it contains more upside volatility than downside.

8. What is the Options strategy for ADOM listed on this Quote Page?

Predicted Move for ADOM is 4%. That means we are expecting the stock ADOM to move 4%.
If we sell Puts at strike price close to 8%, the stock is less likely to reach the strike price. As a result, Options for ADOM could expire worthless. You get to keep the whole premium.

This is a short term Option strategy to take advantage of High Volatility from Earning Announcement of ADOM. Proceed with caution. Strategy has degree of success but there are no guarantees.
Ideally the options for ADOM will expire worthless. But if the ADOM stock falls to your strike price, you then need to buy the stock.
This strategy for ADOM is independent from the Fast Money Trader (1-Day Hold) and Weekly Winners (7-Day Hold) strategies.

The estimated EPS for this quarter is . Historical EPS Performance for last 12 Qtrs is

The EPS Chart for ADOM contains the comparison between estimated EPS provided by Wall Street Analysts and Actual EPS
delivered by ADOM. It also provides the future guidance information for upcoming four quarters.

Chart Loading...

Click on data point to hide/view

Below table tells us that how ADOM has been historically reacting after Earnings Announcement (EA). Following Earnings result, share price were DOWN 6 times out of last 11 Qtrs

Next Day Volume - Average Next Day Volume is 354,912 and Average Daily Volume is 187,729. This data point is very
helpful if you choose to trade Earnings Result of ADOM in the same Extended Trading Hours as it is announced. If the ADOM trading volume in extended hours is less
than 50% of next day volume, there is a great amount of probability for the stock to move in that direction following regular trading session.

Move On 7th Calendar Day - Below table also includes historical stock movement of ADOM on 7th day after EA. This data point is important
for Ride-the-wave strategy.

This data point is very helpful for gap trading because you could have a company that swings 5% +- but their final percent move is only a fraction. The reason why a stock not necessarily is very volatile after EA is because the investors are digesting information provided by companies in conformance call.